IMF’s Effective Policies for Crypto Assets
The International Monetary Fund’s Executive Board is said to have discussed a board paper on the Elements of Effective Policies for Crypto Assets. The alleged paper provides members of the International Monetary Fund with guidance on key elements of an appropriate policy response to crypto assets.
Furthermore, the goals of the paper are said to be consistent with the International Monetary Fund’s mandate of promoting economic and financial stability among its members. Aside from that, the paper has addressed questions raised by members of the International Monetary Fund regarding the benefits and risks of crypto assets, as well as how to structure appropriate policy responses.
The Nine Elements
The aforementioned study purported to operationalize the concepts set out in the Bali Fintech Agenda. Additionally, it incorporated macro-financial factors including the effects on monetary and fiscal policies. The proposed principles are also perfectly in line with the Financial Stability Board’s and other standard-setting bodies’ pertinent norms.
According to sources, the aforementioned paper identified nine components to assist member nations in developing a thorough, uniform, and coordinated policy response. The aforementioned principle is purported to be based on preserving monetary sovereignty and stability, preventing excessive capital flow volatility, analyzing and disclosing fiscal risks, adopting ambiguous tax treatment of crypto assets, and ensuring the legal certainty of crypto assets and mitigating legal risk.
Developing and enforcing prudential, conduct, and oversight requirements for all actors; creating a framework for joint monitoring across agencies and authorities; creating international collaborative arrangements to improve supervision; observing the effects on the stability of the international monetary system; and fostering international cooperation to build digital infrastructures are other aspects that are also highlighted in the aforementioned paper.
The cryptocurrency sector went through a difficult period last year, during which a number of crypto exchanges and other organizations collapsed and the value of the number of crypto assets decreased. Authorities are said to have prioritized developing strong policies right away because of this situation because it was thought that the cryptocurrency business was still developing despite the current slowdown.